Sellers ramp up price cuts to woo struggling buyers

Rhea-AI Summary

Zillow's latest market data reveals sellers are increasingly cutting home prices as high mortgage rates impact buyer activity. Nearly 23% of sellers reduced their list prices in January 2025, the highest share in Zillow records. Despite challenges, home values are up 44% compared to pre-pandemic levels and have risen 2.6% year over year.

New listings increased 12% year over year as rate lock effects diminish. Competition varies significantly by region, with homes selling fastest in coastal metros like San Jose and Boston. The median time to pending sale is 38 days nationally, slower than last year but faster than pre-pandemic norms. Price cuts are most prevalent in Phoenix (34%), Tampa (32%), and Jacksonville (31%).

While 25% of homes sold above asking price in December, buyers now have more negotiating power than in any January of the past five years. Mortgage rates reached 7.04% in January, contributing to a 3.6% year-over-year decline in pending sales.

Positive

• Home values up 44% compared to pre-pandemic and 2.6% YoY
• New listings increased 12% YoY
• 25% of homes sold above asking price in December
• Homes selling 10 days faster than pre-pandemic norms

Negative

• 22.8% of listings had price cuts, highest January level since 2018
• Pending sales declined 3.6% YoY
• Mortgage rates increased to 7.04%, highest since May
• Several major markets showing negative YoY price growth (Austin -3.4%, Tampa -2.8%)

News Market Reaction

-10.70%

1 alert

-10.70% News Effect

On the day this news was published, ZG declined 10.70%, reflecting a significant negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Competition over homes is relatively soft as mortgage rates stymie sales, letting inventory recover

• Nearly 23% of sellers cut their home's list price, the highest share of any January in Zillow records.
• Buyers have more negotiating power than in any January over the past five years.
• Competition varies widely by region but is fiercest in the San Francisco Bay Area and the coastal Northeast.

SEATTLE, Feb. 12, 2025 /PRNewswire/ -- Persistently high mortgage rates are having a bigger impact on buyers than on sellers as the home shopping season approaches,  the latest data from Zillow® shows. Though competition varies greatly by region, most buyers in the market today have a good chance of seeing a price cut on their saved listing. 

"Homeowners are finally coming back to the market as the effects of rate lock ease over time, but buyers are still struggling with high monthly costs," said Skylar Olsen, Zillow chief economist. "Sellers are in a good position, and are willing to make price cuts to close a deal. Home equity is near record highs, and the general economy and financial markets are surprisingly strong. Homes are selling faster than they did before the pandemic." 

Home values are up 44% compared to before the pandemic and have risen 2.6% year over year. There are wide differences in annual appreciation throughout the country, ranging from an 8.1% rise in San Jose to a 3.4% drop in Austin. 

Mortgage rates ticked up to 7.04% in January, the highest level since May and significantly higher than the mid-6% rates seen in January last year. That gave buyers facing affordability challenges stronger headwinds in closing the deal — newly pending sales fell 3.6% year over year. 

What sellers are seeing
Sellers seem less concerned about rate movements. New listings hitting the market from existing owners rose nearly 12% year over year. The hold of "rate lock" is weakening over time as homeowners rack up equity and encounter pressing reasons to sell. Zillow surveys of recent sellers show 78% were influenced by life events to make their decision to sell, such as landing a new job or a change in family size. 

The same survey found just 54% of sellers then bought a home, the lowest share since 2018 and down from 70% last year. 

New listings are rising the fastest year over year in expensive Western markets, led by Portland (up 48%), Seattle (40%), Denver (34%) and San Francisco (32%).  

Despite the challenges for buyers, plenty of sellers are getting more than they asked for. Nearly 25% of homes that sold in December — the latest data available — did so for more than the original asking price. That's compared to about 19% before the pandemic.

What buyers are seeing
While high rates are frustrating, buyers have a good chance to find deals on the margins. Zillow's market heat index shows buyers have more power in negotiations than in any January over the past five years. 

Almost 23% of sellers cut the price of their listing last month, the largest portion for any January since 2018, when Zillow began tracking the metric. The share of listings with a price cut rose the most year over year in Denver, Las Vegas, San Diego and Austin. 

Price cuts are most common in Phoenix, where they're found on more than one-third of listings (34%), Tampa (32%), Jacksonville (31%), and Orlando and Dallas (both with 29%). 

Nationally, homes that sell are typically under contract in 38 days. That's nine days slower than last year but nearly 10 days faster than pre-pandemic norms. 

However, regional variation in competition is massive. Homes are selling in two weeks or less in expensive coastal metros like San Jose, Boston, Seattle and Washington, D.C., and far more slowly in the South; New Orleans and Atlanta join Texas and Florida metros with the most relaxed pace of sales.  

Metro Area*	Zillow Home Value Index (ZHVI)	ZHVI Change, Year over Year (YoY)	Share of Listings with a Price Cut	Share of Listings Sold Over List Price (December)	Change in New Listings (YoY)	Change in Inventory (YoY)	Median Days to Pending
United States	$356,776	2.6 %	22.8 %	24.8 %	11.5 %	17.6 %	38
New York, NY	$676,723	6.0 %	12.1 %	48.7 %	-3.9 %	-8.1 %	44
Los Angeles, CA	$946,931	4.3 %	17.0 %	40.7 %	24.9 %	32.0 %	24
Chicago, IL	$324,595	5.5 %	22.1 %	30.1 %	5.1 %	4.3 %	21
Dallas, TX	$368,789	-0.7 %	28.7 %	15.5 %	17.2 %	29.8 %	51
Houston, TX	$306,027	0.4 %	26.2 %	13.7 %	14.1 %	24.7 %	52
Washington, DC	$570,191	4.5 %	18.3 %	35.7 %	20.9 %	19.8 %	12
Philadelphia, PA	$362,962	4.6 %	20.7 %	36.4 %	11.7 %	6.6 %	17
Miami, FL	$483,774	0.5 %	25.1 %	7.9 %	2.0 %	28.1 %	65
Atlanta, GA	$376,238	0.0 %	26.6 %	18.7 %	8.7 %	37.5 %	56
Boston, MA	$692,137	4.6 %	15.7 %	45.2 %	2.4 %	2.5 %	10
Phoenix, AZ	$448,824	-0.8 %	33.5 %	14.9 %	26.2 %	32.8 %	38
San Francisco, CA	$1,129,010	2.7 %	15.9 %	49.7 %	32.3 %	27.9 %	14
Riverside, CA	$580,994	2.3 %	21.5 %	36.8 %	18.0 %	29.4 %	40
Detroit, MI	$250,132	5.0 %	20.6 %	30.7 %	5.5 %	5.9 %	22
Seattle, WA	$737,843	5.1 %	19.3 %	28.2 %	39.6 %	32.8 %	11
Minneapolis, MN	$368,944	2.8 %	19.8 %	30.5 %	11.9 %	11.5 %	44
San Diego, CA	$932,108	3.2 %	23.0 %	33.9 %	14.0 %	32.6 %	20
Tampa, FL	$366,402	-2.8 %	32.4 %	14.3 %	14.0 %	22.4 %	43
Denver, CO	$578,221	0.7 %	28.5 %	22.7 %	33.7 %	40.2 %	35
Baltimore, MD	$387,205	3.7 %	22.0 %	38.1 %	13.2 %	11.4 %	17
St. Louis, MO	$251,413	4.2 %	19.6 %	31.3 %	4.1 %	10.2 %	20
Orlando, FL	$389,487	-0.6 %	29.1 %	12.3 %	16.5 %	30.6 %	49
Charlotte, NC	$378,271	1.6 %	25.8 %	18.4 %	12.8 %	29.5 %	40
San Antonio, TX	$279,520	-1.8 %	28.1 %	14.2 %	4.4 %	12.8 %	76
Portland, OR	$543,598	1.7 %	22.6 %	25.0 %	48.3 %	20.3 %	23
Sacramento, CA	$574,976	1.9 %	20.9 %	33.4 %	27.5 %	27.0 %	20
Pittsburgh, PA	$211,227	2.6 %	20.8 %	20.8 %	-1.2 %	12.3 %	43
Cincinnati, OH	$285,289	5.0 %	23.1 %	25.8 %	5.0 %	7.0 %	17
Austin, TX	$438,906	-3.4 %	24.7 %	10.7 %	13.5 %	7.4 %	87
Las Vegas, NV	$431,197	5.0 %	25.5 %	17.9 %	25.0 %	35.8 %	41
Kansas City, MO	$300,871	3.7 %	22.0 %	26.0 %	6.2 %	17.8 %	23
Columbus, OH	$313,400	3.8 %	24.9 %	28.7 %	10.5 %	21.4 %	14
Indianapolis, IN	$275,992	3.6 %	26.4 %	17.0 %	2.4 %	7.5 %	33
Cleveland, OH	$228,297	6.6 %	20.3 %	31.3 %	1.6 %	2.9 %	18
San Jose, CA	$1,600,673	8.1 %	13.1 %	56.3 %	30.6 %	22.1 %	9
Nashville, TN	$443,534	1.9 %	28.4 %	12.7 %	27.7 %	26.7 %	48
Virginia Beach, VA	$350,383	4.6 %	21.5 %	35.2 %	8.6 %	17.0 %	38
Providence, RI	$480,761	6.7 %	18.2 %	44.3 %	6.8 %	5.2 %	17
Jacksonville, FL	$349,746	-0.9 %	30.8 %	9.7 %	16.2 %	30.1 %	65
Milwaukee, WI	$345,106	5.5 %	16.3 %	41.1 %	11.4 %	5.2 %	34
Oklahoma City, OK	$231,696	2.5 %	25.9 %	19.6 %	11.0 %	14.7 %	42
Raleigh, NC	$436,817	0.8 %	26.2 %	18.9 %	18.2 %	24.5 %	25
Memphis, TN	$234,187	1.2 %	25.8 %	14.2 %	26.3 %	10.7 %	40
Richmond, VA	$371,172	4.2 %	22.2 %	34.9 %	-5.8 %	12.1 %	15
Louisville, KY	$260,162	5.4 %	25.5 %	21.5 %	-2.6 %	9.3 %	31
New Orleans, LA	$234,359	-1.1 %	23.7 %	10.5 %	0.3 %	11.3 %	67
Salt Lake City, UT	$546,129	3.1 %	27.5 %	23.3 %	22.1 %	19.1 %	35
Hartford, CT	$363,608	6.3 %	15.2 %	61.8 %	10.8 %	12.8 %	9
Buffalo, NY	$255,892	5.3 %	15.1 %	60.5 %	1.7 %	3.1 %	24
Birmingham, AL	$247,772	0.9 %	22.5 %	20.8 %	-1.3 %	9.2 %	46

*	Table ordered by market size
1	The Zillow® market report is a monthly overview of the national and local real estate markets. The report is compiled by Zillow Research. For more information, visit zillow.com/research.

About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing, and renting experiences. 

Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce®, and Follow Up Boss®. 

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2025 MFTB Holdco, Inc., a Zillow affiliate.

(ZFIN)

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/sellers-ramp-up-price-cuts-to-woo-struggling-buyers-302374413.html

SOURCE Zillow

FAQ

What percentage of ZG home listings had price cuts in January 2025?

22.8% of listings had price cuts in January 2025, the highest share for any January since Zillow began tracking this metric in 2018.

How much have ZG home values increased since pre-pandemic levels?

Home values have increased 44% compared to pre-pandemic levels and have risen 2.6% year over year.

Which cities showed the highest percentage of ZG price cuts in January 2025?

Phoenix led with 34% of listings having price cuts, followed by Tampa (32%), Jacksonville (31%), and Orlando and Dallas (both 29%).

What is the current median time to pending sale for ZG listings nationally?

The national median time to pending sale is 38 days, which is 9 days slower than last year but nearly 10 days faster than pre-pandemic norms.

What percentage of ZG homes sold above asking price in December 2024?

25% of homes sold above their asking price in December 2024, compared to about 19% before the pandemic.